What We Take For Granted

A recent announcement in the UK, that all non-essential surgery scheduled in January is to be cancelled in order to free up hospital space in expectation of a heavy flu season, raises a reality that advocates for socialized medicine in America routinely overlook or deliberately ignore.

Economics, often called “the dismal science,” can be viewed in many ways. One such is studying the allocation of scarce resources, or, in other words, anything that there is not an infinite supply of. In a freely operating market, that allocation – the matching up of supply and demand – typically occurs through pricing. Prices are signals from and to the various participants in a market, and as demand or supply changes, prices change to restore balance or equilibrium.

That’s all fancy talk for a process that most of us barely acknowledge or even notice in anything more than a passing manner. How many of us, for example, consider the meaning behind apples or bananas being really cheap or really expensive at the supermarket? The lovely thing about free markets is that we don’t have to. Adam Smith’s “invisible hand” is a metaphor for a very real and very effective phenomenon.

What happens, though, when free markets are eschewed in favor of some other economic system? The reality of scarcity does not go away. Nothing becomes infinitely available at zero cost. A mechanism must exist to balance supply and demand, and if free-market prices are not permitted, something else must take its place.

What we see throughout the world, in places where things are not left alone to be guided by the invisible hand, is some sort of third-party control of the allocation of goods and services. Rationing – the allocation of scarce resources normally effected passively via free market pricing – must be done actively by someone granted the authority to do so.

Opponents of socialized medicine have long made the point that nations with such systems ration health care services by restricting access. That’s done by deciding for the doctor and patient which treatments are permitted, whether a given patient qualifies to receive a treatment, and, most relevantly, making a patient wait for a treatment.

Consider that patients needing bypass surgery in America routinely get treated with negligible wait time, while in first world nations with socialized medicine (e.g. Canada, UK, Sweden), wait times can run 6 weeks or longer. Consider that hip replacements in America are associated with wait times of 3 weeks or so, vs 3 months or more in socialized medicine countries. This is the norm, and it is both predictable and predicted. No central planner, no army of bureaucrats, no Solomonic wise men are as capable of managing scarcity as millions of independent actors interacting in a free market are – both in theory and in historical experience.

Thus, the UK’s National Health Service has to push back all elective surgeries for a(nother) month, because winter.

Would any American you know stand for that? We are a society that is wholly accustomed to getting what we want when we want it. Minor delays in relatively benign matters (traffic, air travel) make us nuts, so imagine how we’d react if we had to suffer hip pain for 3 or more months rather than a couple weeks. Imagine if we were told that we needed a triple bypass, but there were no scheduled openings for 6 weeks? Imagine the collective freakout and the storming of the gates that would ensue.

That is the reality of socialized medicine ignored by its advocates. That is the cold, hard truth: that reduced access to health care is the outcome of the understandable but naive/quixotic insistence that the only way to improve access to health care is by nationalizing it.

No, we cannot do it better than those other nations can. In fact, we’d do it worse. We’d try to make health care “free” without the time rationing or access rationing, which would only serve to make it more expensive. Since tax money is itself a scarce resource, something else would have to give. What are socialized medicine’s advocates willing to pay or give up in exchange for “free” health care without the restrictions and long waits? Massive taxation is one way to go (and it’s the European way). This would mean less disposable income for the working and middle classes and less private sector investment capital to fuel the economy, which translates to lower standards of living and a slower economy. Standards and growth that would lag even Europe’s lower-than-America model, given that we’d want to do better than Europe does in health care.

It’s quite obvious to anyone who hasn’t crazy-glued himself to socialized medicine advocacy that what we take for granted here in America cannot be reconciled with single-payer health care. Will we accept long waits as a “new normal” in exchange for some illusion of universal coverage? I doubt it.

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.

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Clear exposition, in a moment when we are given an example of the effects of central planning.

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With all the various health insurance arrangements we have in the U.S. you can’t really say that price acts in the same way as it does with apples and bananas. The consumer is often removed from the price at the point of service, as there lies a big part of the problem.

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That’s a whole discussion unto itself, and it’s one that’s rooted in decades of bad policy. I touch on it here:

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Can’t put this solely on the government. It’s the “third party payer” that accounts for partial loss of pricing signal, and private plans have been part of that since day one.

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Well, not really. Third-party-pays health insurance came into being in the 1930s, and truly got its foothold during WWII. Its growth was driven by a couple government actions. First, companies lobbied Congress (successfully) to allow the treatment of employer-provided health insurance as an expense to the company but not as income to the employee. That fundamentally skewed things in favor of employer-provided insurance and away from that purchased by individuals on the open market, because the former was untaxed and the latter had to be paid for with after-tax dollars.

Then, during WWII, the government instituted a wage freeze, which the big defense companies worked around by offering health insurance and other benefits in lieu of higher wages in order to attract workers.

So, third-payer itself is a result of government meddling in the free market.

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Considering how strongly the profit motive in health care pushes patients to have procedures, having some delay in the ELECTIVE ones doesn’t seem such a bad thing.

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Who should make that decision? Shouldn’t it ultimately be up to the consumer?